If you own a business or plan to start one, then this post will help you learn about
The human psychology factors you’re about to read were introduced by Charlie Munger, an American investor and ex-partner of billionaire Warren Buffet. Therefore, pay attention as they come from somebody ultra-successful.
1. Reward/Punishment Tendency
This sounds like common sense, but the power incentives have over the behaviour of human beings is greatly underestimated. Unfortunately, most business owners make the mistake of not understanding the right desired situation of their target audience. Therefore, end up delivering something that they didn’t require in the first place and fail.
The opposite to this would be the fear of punishment. Human beings (like dogs and lab rats) can be trained to not take certain actions and the final outcome would be a punishment. This allows them to shape their behaviour pattern in such a manner that would avoid punishment and do the right thing to get the necessary reward.
Example – Several scientists train lab rats to do
2. Liking/Loving Tendency
Think about the people, products, or companies that you really admire. Do you have more positive vibes for those or negative vibes? The answer is generally positive. Humans tend to ignore the faults about the things we really love and only focus on the plus points. For example – if you like sports and support a particular team, you will tend to favour them in majority of the circumstances irrespective of the fact how their performance is.
How can you apply this to your business? Well, if you build a certain level of trust with your audience, then they will be more inclined to accept your positives and ignore the negatives of your brand. This will give you an edge over your competitors trying to sell without the “trust-factor.”
3. Dislike Tendency
This bias is the opposite of the one discussed above and states if somebody dislikes you in the first place, then no matter what you share with them (irrespective of the fact if it’s true or not), they will ignore you. For example – if a person you dislike is wearing a fancy jacket, you will ignore the qualities of his outfit and judge them based on the personal opinion you have about that person.
How does this apply to your business? If your company does something negative that makes your audience angry (no matter how small or big). They will remember that one mistake and judge all your future actions based on it.
4. Inconsistency-Avoidance Tendency
Human beings are creatures of habit and this makes them want to repeat the same pattern everyday. If you think about it, this comes feature is instilled inside of us since the time we were cave men. Our habits helped us survive by utilising our conscious part of the brain. This benefited while hunting and doing other activities to live.
How does this apply to business? Just like humans, businesses are creatures of habit as well. Why? Because they are run by none other than human beings. Therefore, when new technological changes take place, they fail to adapt and keep repeating the same old things. Example – Blockbuster was a DVD rental chain in
5. Curiosity Tendency
Human beings are curious creatures and when they see something different/unusual, they become curious to check out what’s going on. In fact, this has been one of the leading factors that has contributed to our evolution. Our curious mind encouraged us to invent things and level-up our lifestyle.
How does this apply to business? Well, take a look at how you came across UAbility (our website). You were scrolling through Facebook when you came across a post about something that was unusual that what rest of the marketers in our country are doing. Therefore, you decided to check out what’s going on. Similarly, you can attract your target audience by introducing the curiosity factor.
6. Kantian Fairness Tendency
According to Charlie Munger, “tolerating a little unfairness should be okay if it means a greater fairness for all.” This is a really good point that a lot of people don’t understand or accept. One should try to focus on the consequences of their actions for the greater good rather than just being selfish.
How does this apply to business? The principle of customer obsession is wildly followed and applied by the CEO of Amazon – Jeff Bezoz. Inside your business, there are either your customers who will take the pain or it will be your business. This means that you can either not care about your customers and deliver them a product isn’t top quality and has bugs. Or you can take the time and resources to build an ultimate product that contributes to the greater good of your customers.
7. Envy Tendency
If you really think about it, most of the resources (mainly materialistic things) that you desire are because you saw somebody else own it and lacked the ability to get it for yourself. According to me, people aren’t greedy, but they’re definitely jealous.
How does this apply to business? This applied in two different ways that I recently observed –
* Most businesses envy their competition and just focus on what they’re doing. While fighting for the big seat, they forget about the people who provide the fuel to keep their car running – their customers.
* Companies like Lamborghini and Rolls Royce create automatic demand for their product when they are available in scarce to a limited number of people. This creates envy between people and it becomes their dream to own something like this one day even if they might not necessarily need it.
8. Reciprocation Tendency
According to this tendency, humans tend to return the favour to somebody if they genuinely provided them with value. Take a look at this post for example – I am writing this content and know that I’ll be making NOTHING out of this content. However, I am still sharing this with you so that you can gain some kind of value.
How does this apply to business? If you begin your relationship by providing value with your audience rather than pitching them like everyone else, then there is a good chance that they might reciprocate by picking you over the competitors.
9. Influence -From-Mere Association Tendency
We get easily manipulated by a mere association, product quality, or a particular advertisement.
How does this apply to business? There is a good chance that you’ll pick Nike over other brands if they did a special ad that motivated you. Certain features of your business attract specific people. Therefore, make sure everything is world-class.
10. Simple, Pain Avoiding Psychological Denial
People tend to avoid pain and the facts that are causing the pain. They tend to do this until the pain has become so extravagant that nothing can be done to fix the issue.
How does this apply to business? Several people you’ll talk to would deny that their business is in pain. In fact, they would get offended if you tell them there is something wrong with their business. Don’t be like that and always accept the harsh truth about your business so that you can improve accordingly.
These are the 10 human psychology factors we wanted to share with you today. Interested in learning more and discovering how to start or grow an online business in India (even if you have ZERO experience)?
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